Article Details

  • Environmental Management
Posted: 17 Feb 2016

CAN YOUR INVESTMENTS SAVE THE WORLD

Knowing how your money is being used responsibly gives you peace of mind. Transparency is the new key word when it comes to investing. Gone are the days when your money was handed over to a financial institution and you simply checked in to ensure the returns graphs were showing the right kind of peaks.

But saving for your financial future, and ensuring that the investments you make today have the right impact on the future world, has become a challenge facing the investment industry as a whole. And it is responding with innovations in both the listed and unlisted environments to provide clients with attractive investments that support the transition to a low-carbon, resource-efficient, socially inclusive economy.

As part of the investment community, the power is literally being put back into your hands so you are comfortable that your funds are being used ethically and responsibly. And asset managers are wising up to the fact that there is an increasing need and mandate for savings and investments to be directed to areas of the economy that build resilience and social inclusion. For example, the Old Mutual Investment Group has already invested R27 billion in green economic growth projects, including sustainable agriculture, affordable housing and education.

Old Mutual is also a major participant in ground-breaking renewable energy programmes which leverage private sector capital to meet the country’s growing energy demands using low-carbon alternatives.

And it’s happening all over the world. Over 1 200 asset owners, investment managers and professional service partners have become signatories of the UN-backed Principles for Responsible Investment (PRI). Broad acceptance of these practices has translated into strong demand for sustainability-themed investment products, and Campden Research shows that the global market in sustainable investments - funds that are rated on environmental, social and governance (ESG) factors - is expected to grow at a rate of approximately 25% a year.

Investing in people and infrastructure

The impact of your investment on the environment is of course a chief concern, but there’s more to consider than simply how green your investment is. There are exciting opportunities within the South African context to align investments with the National Development Plan, and contribute to transport, telecoms, housing and education infrastructure, as well as sustainable agriculture. The infrastructure development is crucially needed to develop our country, and both listed and unlisted initiatives can secure the assets necessary for future generations and generate sustainable long-term returns for you as a client.

How Green Is Your Asset Manager?

It’s not just about ticking boxes. You want to know that your contributions are truly being used responsibly. Your asset manager should be able to provide you with details of their environmental, social and governance (ESG) analyses.

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